Marriott Agrees to Buy Protea’s Hotel Brands

Nov. 7 (Bloomberg) -- Marriott International Inc. agreed to
buy the three brands and management business of Cape Town-based
Protea Hospitality Holdings, a deal that would almost double the
company’s rooms in Africa.

Marriott, the largest publicly traded U.S. hotel chain,
signed a letter of intent to acquire the business, which
operates or franchises 116 hotels in South Africa and six other
sub-Saharan countries, according to a statement today by the
Bethesda, Maryland-based company. Terms weren’t disclosed.

The transaction would give Marriott 23,000 rooms in Africa
and help the company grow further in the region, according to
the statement. Hotel investors and operators are expanding in
Africa as the continent benefits from rising demand for lodging
and increasing trade with nations such as China. More than half
of Africa’s countries probably will have gross domestic product
growth of 5 percent annually through 2016, according to
Economist Intelligence Unit Ltd.

“Africa has significant untapped potential for travel and
tourism, both as a destination and source of new global
travelers,” Marriott Chief Executive Officer Arne Sorenson said
in the statement. Economic growth over the next several years
“will raise more people into the emerging middle class.”

Protea owns the Protea Hotels, Protea Hotel Fire & Ice! and
African Pride Hotels brands. The company runs 80 hotels in South
Africa as well as properties in Malawi, Namibia, Nigeria,
Tanzania, Uganda and Zambia.

Under the deal, Protea will remain the owner of the hotels
it currently owns and will retain minority interests in some of
its managed properties. The transaction is scheduled to be
completed in the first quarter.